Short Term ARMs a solution?

Should People with Jumbo loans be looking at the 1 month LIBOR ARM as a solution? Now that the LIBOR spread has come back to normal, the 1 month LIBOR may be the best way to finance a home for the next few years. With the LIBOR at 1.82% and a margin of 1.75%, the interest rate today is 3.57%. The best rate for a Jumbo 30 year fixed right now is around 7.0%. The monthly savings on a $600,000 mortgage is $1,273 per month. Keep that $1,273 per month aside in a CD at 4.0% and it will grow to $43,000 in just 3 years. The LIBOR will go back up again, but not until the current financial mess is over and the Federal Reserve starts raising rates again.

The 1 Month LIBOR mortgage is a great way to save a tremendous amount on interest payments over the next few years. Be ready to refinance when Jumbo fixed rates drop or LIBOR rates look like they will increase higher than current fixed rates.